Many countries snatched the work from Adani: They are not even following Modi’s recommendations, the entire ecosystem has failed

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Adani Group’s International Struggles: Navigating Global Challenges Amidst Political Support

Introduction: The Rise and the Fall of Adani Group’s Global Ambitions

The Adani Group, a massive conglomerate led by Gautam Adani, has witnessed meteoric growth in recent years. With interests spanning from energy and infrastructure to mining and transportation, Adani’s rise has been marked by large-scale projects in India and abroad. The Group’s ambition to become a global powerhouse has often been supported by political figures, including Indian Prime Minister Narendra Modi, with whom Adani shares a reportedly strong relationship. The rapid expansion of Adani’s businesses in various sectors, from power plants to seaports, led to increased visibility on the international stage.

However, this meteoric rise has been accompanied by a growing series of challenges, especially in international markets. Allegations of financial irregularities, environmental concerns, and issues related to local communities have undermined Adani’s position in several countries, leading to a reversal in the company’s global expansion plans. Several governments and businesses have re-evaluated their partnerships with the Adani Group, leaving it to grapple with diplomatic, financial, and regulatory obstacles.

In this article, we will explore the reasons behind the struggle of the Adani Group in global markets, the challenges faced due to regulatory scrutiny, political backlash, and the growing distance between the company’s ambitions and its realities. The role of political influence, particularly the close ties with Narendra Modi, will also be examined to understand the broader dynamics at play.

The Initial Rise: Political and Business Synergy

Gautam Adani’s rise to prominence is often closely linked to India’s own economic growth, particularly in sectors like energy, infrastructure, and logistics. His businesses capitalized on India’s expanding infrastructure needs, supported in no small part by favorable policies under Prime Minister Narendra Modi’s government. In many ways, Adani’s businesses aligned with Modi’s vision of modernizing India’s infrastructure, developing ports, airports, and green energy sources.

The Adani Group’s rapid expansion both within India and globally can also be attributed to its strong political connections. Adani has maintained a cordial relationship with Modi, which has led to allegations of crony capitalism and preferential treatment. The Indian government, under Modi’s leadership, has provided several incentives for the development of large-scale projects, especially in infrastructure. The close alignment of Modi’s policies with the Adani Group’s business model has led critics to believe that the conglomerate has benefitted from government favoritism.

Adani’s international ventures also aligned with Modi’s broader geopolitical ambitions. Modi has often touted the Adani Group’s successes as examples of India’s growing influence in global markets, and some of Adani’s ventures abroad, such as the Carmichael coal mine project in Australia, received strong political backing from the Indian government.

Global Expansion and the First Signs of Trouble

In recent years, the Adani Group expanded its operations to several countries, focusing on infrastructure, energy, and port operations. However, as the group ventured into international markets, particularly those with stricter regulatory environments, it began to face significant challenges.

Australia: The Carmichael Coal Mine Controversy

The Carmichael coal mine project in Queensland, Australia, stands as one of the most controversial international ventures of the Adani Group. While it was hailed as a massive infrastructure investment that could create thousands of jobs and fuel India’s energy needs, it also attracted fierce opposition from environmentalists, indigenous groups, and local communities. The project was criticized for its potential environmental impact, particularly in the context of the Great Barrier Reef and its contribution to climate change.

Despite the Australian government’s approval of the project, global criticism continued to mount, especially after the 2019-2020 bushfire season in Australia, which further fueled environmental concerns. Several international financial institutions, including major banks, distanced themselves from the project due to the growing risks related to climate change and environmental degradation. Despite having political support from Modi’s government, Adani faced an uphill battle in winning the approval and support of local governments and international financial institutions.

Moreover, the project faced significant opposition from local Australian politicians, who were influenced by environmental concerns and public pressure. Adani’s struggles in Australia epitomized the difficulties the company encountered as it tried to expand internationally, particularly in developed countries where environmental regulations and public sentiment often clash with large-scale industrial projects.

Sri Lanka: The Hambantota Port Project

Another example of Adani Group’s international expansion that faced significant setbacks occurred in Sri Lanka. The Adani Group was in talks with the Sri Lankan government for a multi-billion-dollar project to develop the strategic Hambantota Port. However, the project was met with strong local resistance, and the Sri Lankan government’s negotiations with Adani Group led to criticism in the media and among political parties.

The opposition parties in Sri Lanka raised concerns about the terms of the deal, fearing that the port project could lead to unfavorable loan terms and loss of sovereignty over key infrastructure. Additionally, local communities and environmental groups expressed concerns about the long-term impact of such a large-scale development on the surrounding ecosystems. Despite these concerns, the Sri Lankan government under President Gotabaya Rajapaksa seemed keen to move ahead with the deal, but the backlash ultimately put the project on hold.

This incident underscored how geopolitical tensions, public opinion, and local politics can derail the ambitions of foreign companies, even when they enjoy political backing from the home country. The Hambantota port deal is an example of how Adani’s international operations could get entangled in local political and environmental issues, despite political support from Modi’s administration.

Bangladesh: Adani’s Power and Energy Projects

In Bangladesh, the Adani Group sought to expand its energy business by securing contracts to supply power to the country. However, there were several setbacks as Bangladesh’s political landscape shifted, and there were concerns over the environmental impact of Adani’s coal-powered plants. The political opposition and environmental protests against coal-based power plants led to delays in the project and forced the group to reconsider its strategy in the region.

Again, despite the strong diplomatic efforts of Modi’s government, the Adani Group faced resistance from local authorities and environmental activists in Bangladesh. The company struggled to establish itself as a reliable partner in the region, especially given the growing focus on renewable energy sources across South Asia.

The Global Scrutiny: Regulatory and Financial Challenges

The international pushback faced by Adani in these countries is also compounded by mounting scrutiny from regulators, financial watchdogs, and the international media. The Hindenburg Research report in early 2023 was one of the key events that highlighted the growing concerns about Adani’s financial practices. Allegations of stock manipulation, use of offshore companies, and corporate governance issues led to a sharp decline in the market value of Adani’s companies.

This financial scrutiny has led several international investors, including hedge funds, to pull back from projects involving the Adani Group. Banks and financial institutions, particularly in Europe and the United States, have expressed concerns about the transparency of Adani’s operations, especially regarding its debts, accounting practices, and environmental record.

Adani’s ambitions to raise funds for its international projects were also hampered by the concerns raised in the Hindenburg report. The group’s ability to secure capital for new ventures has been affected by the negative publicity, further complicating its expansion efforts.

The Failure of the Ecosystem: Political and Corporate Connections Falling Short

The failure of Adani’s international expansion can be traced to several factors, chief among them being the inability of the Indian government’s diplomatic efforts to offset the regulatory, financial, and environmental challenges that the company faced. While the Indian government had pushed for Adani’s success on the international stage, the lack of due diligence, both on the part of the company and its governmental supporters, meant that critical risks were not properly mitigated.

In addition, the political influence that Adani wielded within India could not shield the company from the evolving global standards on climate change, human rights, and financial transparency. The ecosystems that supported Adani’s rise in India—such as political alliances, regulatory exemptions, and preferential treatment—did not have the same effect when the company sought to establish itself in countries with stronger institutional frameworks.

Conclusion: The Road Ahead for Adani Group

The Adani Group’s struggle to expand internationally amid rising scrutiny highlights the complex relationship between business, politics, and global governance. While the company enjoyed substantial support from the Indian government, particularly under the leadership of Narendra Modi, this did not shield it from challenges posed by international regulators, public sentiment, and financial institutions.

The “ecosystem” that once helped Adani thrive in India—political connections, favorable regulations, and financial leverage—has not been as effective on the global stage. This highlights a key lesson: international business ventures cannot succeed on political support alone; they require robust governance, transparency, and a keen understanding of local dynamics and regulations.

As the Adani Group faces continued challenges, the future of its international ventures will depend on how well it adapts to the changing global landscape of business. The company must prioritize financial transparency, environmental responsibility, and effective corporate governance if it hopes to regain international credibility and succeed in its global ambitions.